SWFL.io - Local NewsMCLEAN, Va. (AP) — The average long-term U.S. mortgage rate climbed this week to its highest level in more than six months, driving up borrowing costs during what’s typically the busiest time of the year for prospective home buyers.
The benchmark 30-year fixed rate mortgage rate rose to 6.38% from 6.22% last week, mortgage buyer Freddie Mac said Thursday. One year ago, the rate averaged 6.65%.
The last time the average rate was higher was Sept. 4, when it was at 6.5%.
When mortgage rates rise, they can add hundreds of dollars a month in costs for home shoppers, limiting what they can afford to buy.
Only four weeks ago, the average rate had dropped to just under 6% for the first time since late 2022, but it has been rising as skyrocketing oil prices due to the war with Iran fuel worries about high inflation.
Meanwhile, borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also rose this week. That average rate rose to 5.75% from 5.54% last week. A year ago, it was at 5.89%, Freddie Mac said.
Mortgage rates are influenced by several factors, from the Federal Reserve’s interest rate policy decisions to bond market investors’ expectations for the economy and inflation. They generally follow the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans.
The 10-year Treasury yield was at 4.38% at midday Thursday, up from around 4.26% a week ago.